It’s been 20 years since the Supreme Court rulings in Faragher and Ellerth made corporate anti-harassment efforts routine, yet there are more headlines than ever about blatant acts of harassment, especially among corporate and cultural leaders. Sharing research and our collective experience, this workshop will focus on training, policies and culture-building, to explore why we have failed in preventing harassment, where we have engaged, and how we can elevate behavior. One critical focus will be retaliation vs. a “speak-up” culture, including best practices for creating, maintaining, and getting management support for an Open Work Environment.

Then on Monday, October 21, Amy and I will return to present a discussion on “Counseling compliance in small to medium sized businesses.”

Businesses with under 100 employees make up 97% of US companies, and headlines show they are at least as prone to compliance-related failures as the Fortune 2000. But “SMBs” are unlikely to have a CCO or even GC. So the task of leading and counseling compliance falls to other professionals, including HR and outside counsel. In this panel, Amy and I will explore the unique challenges of compliance leadership in SMBs, where budgets may be limited, processes informal, and executive power dominant. We’ll share experiences, including ways to use regular operational processes as tools to promote compliance, and to use the strong culture in these companies to their ethical advantage.

The idea for this panel was inspired in part by the Charlie Rose episode, which even though it involves a major TV star, is really a failure of small business compliance. Rose’s production company had no HR department, only a executive producer who among other duties may have tended to enable rather than check her “CEOs” misconduct. Our hope is that this panel will be of particular appeals to HR professionals and the “compliance lawyer.”

I’m also very excited that I have been asked to moderate a panel at the upcoming UIDP26 Conference in San Jose, CA.UIDP is the University-Industry Demonstration Partnership, an organization that considers university-industry (U-I) relations and opportunities to develop new approaches to how academia and business can work together. The panel is entitled: “Ethics and Compliance 2018: a University-Industry Dialogue.“

From #MeToo to campus speech to AI to perceived conflicts of interest, concerns about ethics are now even more a part of daily life at companies, colleges and universities alike. For both sides, this concern is only more heightened when it comes to their partnerships with other institutions. (Who are your partners, and what do they appear to stand for?) In this panel, ethics and compliance professionals from academia and industry will share their respective points of view and current concerns. The goal will be for attendees to understand better not just what their partner needs their institution to do, but how it hopes they will do it.

An advance workshop on drafting and negotiating contracts with compliance provisions — this would take the next step from the compliance contract panels that Amy and I did at the CEI in 2014 and this year.

“The Good Reasons Why People Do the Wrong Things” — Exploring the frequent instances when people follow their own ethical code and choose to break rules. (Think about teachers or nurses following their deep ethic of care.) The lesson: it’s not just greed or “bad guys” that lead to misconduct.

“Fostering a Speak-Up Culture: What Really Works” — Now more than ever, it’s critical for compliance professionals and business leaders to focus on what, objectively, has worked best to foster and maintain a culture in which people report suspected wrongdoing freely, constructively, and internally. So how do you make that happen?

I wish they’d let us do all three of them! So tell me, what’s your favorite?

I wrote last month about concerns that the Justice Department may have gotten off to the wrong foot, tone-wise, following its “Yates Memo” declaration that it intended to prosecute individuals within companies for their organization’s wrongdoing.

But, as Mike Volkov so well summarizes, the top enforcer on this playing field quickly found a case with which to make its point. On October 29th, the DOJ announced a $125 Million criminal settlement with pharmaceutical company Warner Chilcott (once Galen, now Actavis). In the same breath, Justice also announced criminal charges against four company employees — including the company’s former president. According to the release, several other employees have already pled guilty or been indicted on criminal charges. The cases arise from Warner Chilcott’s payment of kickbacks to physicians to induce them to prescribe its drugs.

“Pharmaceutical company executives and employees should not be involved with treatment decisions or submissions to a patient’s insurance company. Today’s enforcement actions demonstrate that the government will seek not only to hold companies accountable, but will identify and charge corporate officials responsible for the fraud.”

Interesting, and not surprising, that Justice struck this blow in the healthcare industry. Pharma and Medical Technology have been the industries on the bleeding edge of enforcement (and internal compliance efforts) since the 90’s (at least).

In commenting on my earlier post about the tone being struck by the DOJ, Scott Killingsworth pointed out that “the DOJ will tell you what they are going to do, and then by golly they will do it.” I agreed, and I speculated that the Department must be “itching” to prosecute some company executives. Not that it took much in the way of powers of prediction, but it looks like we were right. Executives and companies who ignore the Yates Memo do so at their peril.

In honor of the end of baseball season, I am recalling (and revising) some thoughts I originally posted last fall— and adding some pictures. Hope this takes you out to the ball game.

By Wednesday, the Major League season will come to its last glorious inning. And this afternoon, my son will catch the last game of the year for his Babe Ruth League team, ending a long string of seasons and games that began in March. So

Doing what I do, every time I leave the clean white chalk powder on the rusty matte of the base paths, I think to myself, “Even here, even now, I’m leading compliance!”

Does that make me Mister Baseball Buzzkill? Yeah, maybe so. But I think there is a parallel between the Compliance Officer and the Groundskeeper.

I mean, compliance is in large part about winning while staying inside the lines. And for an organization, who paints those lines?

Government? Regulators? An industry Code? Your Code of Conduct? Sure, but not precisely.The Rules of the Game may specify that the foul line extends from the first base line and the third base line. But it is still the compliance team that has to paint the lines precisely.

To push my metaphor way too far, compliance leadership has to decide the slope of the base path, and the tendency of slow grounders to stay in bounds or to roll foul. And to abandon the realism of my metaphor, we have to decide whether to paint the lines on our own field with a little cushion, so minor fouls don’t really cross the legal line… or paint the lines wide, to give our organizations a bigger playing field but also a bigger risk of stumbling out of bounds.

But most of all, as compliance leaders we have to do the painting. The Rules may say where the foul line should be, but the players would be left to just guess what’s foul and what’s not if we didn’t draw an actual line that they can see while they are playing. Our teammates rely on our education programs, our communications, and our internal enforcement to know where the dividing line falls.

The author’s first-base line was visibly imperfect, but did not ultimately affect the course of play.

Frankly, I can think of times when my base lines left something to be desired, straightness-wise. The umpire might have checked to see how I drew the line (or he might not have), but once play began, he relied on the white line I put down in chalk. It’s a big responsibility.

So you can picture me standing out there today, superimposing all these philosophical musings about work onto our national pastime. Then you can picture my son pointedly reminding me that the game is about to begin, and that I need to get my carcass off the field, and help coach my players to success.

As compliance professionals and leadership counselors, we focus on “tone at the top.” What the C-Suite says is critical to establishing an ethical culture in an organization. What is even more important to foster that culture is whether top executives speak and act consistently. We advise our leaders that even one act of apparent hypocrisy, or of “looking the other way,” can undo a lot of cover-letters-with-Codes-of-Conduct.

With this perspective, I commend to you two recent blog posts by fellow compliance lawyers, about the tone coming from the very top, compliance wise: the Department of Justice.

One is Mike Scher’s post this week in the FCPA Blog about the DOJ’s findings that downplay the alleged corruption violations by WalMart in Mexico.

At the SCCE’s annual Compliance and Ethics Institute earlier this month, I perceived a consensus of approval among the compliance community for the DOJ’s September 9th “Yates Memo,” in which Deputy Attorney General Sally Quillan Yates sought to send a strong message that the DOJ would henceforth be eager to prosecute culpable individuals for wrong-doing within the corporations they lead. There were many concerns (see this and this), yet the general thought seemed to be that the tone set by the Yates Memo would reinforce our efforts to get buy-in within our companies.

But Mike Volkov raises this concern: with the GM case (as now with WalMart), do the DOJ’s actions speak louder, tone-wise, than Yates’ words?

As important as it usually is that “Compliance” be independent from “Legal,” there are realms in which it’s best when those two functions are full collaborative partners. One of those is the realm of contracts with third parties.

That was an inescapable take-away from a session on October 5th at the SCCE’s annual Compliance and Ethics Institute: “Peer-to-Peer Compliance: Are Y
our Contract Clauses Running Offense and Defense For Your Ethics and Compliance Program?” I had the honor of presenting the session, with Amy Hutchens of CLEARresources. I also had a complete blast, pretending to negotiate typical clauses with Amy, fielding questions about covenants that troubled SCCE colleagues in the audience, and sharing our lessons-learned.

Lessons such as?

That the intersection (collision?) of transactional law and corporate compliance is happening more often, as companies pay more attention to the risks their third-party relationships can pose, and authorities from the Sentencing Commission to the FDA voice their expectation that these risks be managed contractually.

That a careless clause can damage the structure or credibility of a company’s compliance regime – but a legal department engaging in zero-sum negotiations, without benefit of a partner from compliance, might miss that risk.

That there are two strategic extremes for the company in the “prime contractor” role, each of which can be problematic: Unyieldingly insist on the most favorable language for your side, and eager vendors may agree even though they know they cannot follow the contract they signed. Take an overly flexible position, open to each vendor’s full range of concerns, and your resources may get nibbled to death while you wind up with no predictable consistency among your agreements.

What’s an enlightened company to do? First, consider your goal – is it to get a signed document full of hard-ball victories, or to have third-parties who are actually working with your guidance to engage in compliant behavior? Assuming it is the latter, your company may be better served by living its core values even in its negotiating style, and by taking a firm, comprehensive, but reasonable form of contract to market. And for that to happen, “Legal” and “Compliance” must work together, and understand the other’s issues.

If you missed the session at the CEI – or if you missed the CEI altogether – no worries. We are reprising the session in the form of an SCCE Webinar, on Tuesday, October 13th. Please join us!

If you are coming as well, I hope you will join Amy Hutchens and me at 1:30 on Monday, October 5th, to explore the increasingly frequent intersection (collision?) of transactional law and corporate compliance.

And even if you are not coming to #SCCEcei, good news! You can still catch our panel, in the form of an SCCE Webinar, on Tuesday, October 13th.

This is our updated remix of the well-received panel we did at the 2014 #SCCEcei. Part of what makes it so much fun is that Amy and I begin the hour by engaging in mock negotiations. Amy plays the lawyer for the big multinational company, I play the lawyer for the smaller vendor/supplier, and we go at it hammer-and-tong over issues like:

Which Code of Conduct should apply to a Vendor?

What training requirements can a general contractor “push down”?

What sales incentives are appropriate?

How can a smaller entity resist onerous auditing. monitoring, and indemnification requirements ?

(OK, I might have shown my character’s bias in that last bullet point.)

After the negotiations, we’ll offer some lessons we’ve learned as compliance-minded transactional lawyers and in-house counsel. Then we’ll open it up to questions, and to any thorny contract clauses with which you might want to challenge us.

This year, we will also spend some of our time on the phenomena of “Quality Agreements,” which are increasingly common for contract manufacturing in the life sciences.

Our point is, when it comes to your company’s routine contracts, the right clause can really bolster your E&C program – and the wrong clause can wreck all your careful work. The trick is knowing which is which, and playing offense and defense so that the contractual playing field leaves your client best positioned for success. That’s something that is not going to happen unless the “legal” and the “compliance” camps in a company work together, and understand the other’s issues.

If you are inclined towards the Orange and the Black and this weekend you are “Going Back” (that is, if you are going to Princeton’s Reunions this weekend), then I invite you to check out a panel I am participating in tomorrow, on the topic “Whistleblower: Tattletales or Heroes?” The panel is one of the Alumni-Faculty Forums that showcase Princeton’s faculty and the expertise of its graduates.

I’ll be joined by Mark J. Biros (Class of ’70), Founder of the White Collar Defense and Investigations group at Proskauer, and Norm Champ (Class of ’85), who until recently was Director of the Division of Investment Management at the SEC and is now a Visiting Scholar at Harvard Law. Our moderator will be Brandice Canes-Wrone (Class of ’93), the Donald E. Stokes Professor at the place I majored, Princeton’s Woodrow Wilson School of Public and International Affairs.

I am sure we will be surveying the state of whistleblowing, and exploring what I think are the highly divergent views that we have of those who “speak up.” On the one hand, corporate compliance programs depend on them; on the other hand, they are “rats” and “disloyal.” Does it just come down to whether they are correct in their reports, or is there more to it? I’m really looking forward to being a part of the discussion – and I will report back on how it goes!

Patricia Arquette, accepting the 2015 Oscar for Best Supporting Actress.

Last Sunday, three of us compliance lawyer types had ourselves a virtual Oscar Party.

We three – Amy Hutchens (CCEP), President of CLEAResources; Kirsten Hotchkiss, now an employment and employee relations counsel with American Express Global Business Travel, and I (President of LeadGood, and also CCEP)– conducted an experiment with the following hypothesis:

IF the leaders of an institution, through their every message and action, set a “tone from the top” that either fosters or undermines the ethical culture of that institution; and

IF the culture of our nation – an institution we all share — is in part determined in those rare events that a large proportion of the population share in-common;

THEN an ethical “tone at the top” will be set by the cultural stars and leaders who speak and act during the massively multi-person annual event that is the Academy Awards.

Amy, Kirsten and I made that hypothesis the topic of a “live-blog” that we conducted Oscar-night on my company’s website. We watched the Oscars along with everyone else, and reacted in real time to those things that compliance lawyer types notice. (You can still read our stream of observations and musings here.)

Our hunch going in was that we might hear a few moments of ethical leadership, and maybe a few ethical gaffes, among the presenters, red carpets types, and the commercials of the Oscar telecast. To our surprise, we (along with the rest of the billion-plus viewership) wound up hearing an almost continual series of stars speaking out forcefully and fervently for noble causes that should command our attention. Just in the acceptance speeches, we heard advocacy for:

Gender Equality (Best Supporting Actress)

A.L.S. (Best Actor)

Alzheimer’s (Best Actress)

Whistleblowers (Best Documentary Feature)

Teen Suicide Prevention (Best Adapted Screenplay)

Returning Veterans (Sound Editing)

Civil Rights (Best Song)

Immigrants’ Rights (Best Picture)

Calling Your Parents (Best Supporting Actor)

As the New York Times put it, “Oscar nights usually do have their share of political posturing, but this was a particularly passionate evening. “

But there was a tone from the top, and it was this: “Speak Out for your Beliefs! Take Action to Help Others!” It was Corporate Social Responsibility Night at the Movies. Hooray for Hollywood!

But on reflection, I wonder if all those appeals blurred together, and if any of them still stand out in the memory of most viewers. It was almost as if the message was, “Everyone has their own cause – so any cause is right.” Having heard so many appeals for action, viewers may have felt ironically unmotivated to action.

So I ask: Was the experience of the Oscar viewer on Sunday that different than the experience of our employees, in this time of the multi-modal, socially savvy, short-message-oriented, compliance communications program? I happen to love the practice of delivering compliance information in shorter bursts at higher frequencies, of “social learning streams” and the like. If we’re not careful, though, does it sound like this?

Don’t discriminate! (HR).

Recycle! (Sustainability).

Wear safety glasses! (EH&S).

No gratuities! (Commercial Compliance).

Donate! (United Way).

Protect our Trade Secrets! (General Counsel).

Protect our Company Data! (IT).

Follow our Code! (CCO).

If our quick compliance hits seem a blur, then the Oscars may have offered two lessons for our programs.

First, Focus. Too many emotional appeals may leave me numb. Too many instructions at once may strain my memory. If everything is important, nothing is important. (Maybe those programs that stress a theme-of-the-month have the right idea.)

Second: don’t just send a message; tell the story. “Still Alice” had a compelling message about Alzheimer’s, and “American Sniper” about veterans and war, because of the power of their storytelling. The movies had the time, and craft, and humanity to make a social issue real. By contrast, the short plugs in the acceptance speeches at the Oscars were only reminders: they returned an issue to the front of mind, and reminded us of something we care about. That is an excellent thing to do in the short nuggets we have added to our compliance messaging.

But the power behind those messages originates in good old-fashioned storytelling. And even in this social age, it is the story that provides the inspiration to act.

Hooray for Hollywood!

P.S. Since our little experiment worked, we’ve resolved to do our “Ethics and the Oscars” live blog again next year. Hope you can join us!